Ministers are preparing to move ahead with pilot schemes for England’s new Infrastructure Levy, with a small number of local planning authorities expected to act as early adopters. While formal confirmation is still awaited, sector briefings point to a “test and learn” roll‑out in which councils trial the mechanics of the Levy before wider implementation. The change matters for developers, housebuilders and contractors because it promises to alter how contributions for roads, schools and affordable housing are calculated and collected. Instead of heavy reliance on negotiated Section 106 agreements and the Community Infrastructure Levy, the new approach is designed to capture a proportion of scheme value in a more consistent way. Timelines remain fluid, but the direction of travel is towards staged adoption, with transitional arrangements to avoid a cliff‑edge for live schemes. For project teams, that means tracking local announcements and factoring possible new cashflow patterns into land bids, appraisals and procurement. The stakes are high: councils are looking for certainty of funding, while the industry is seeking clarity on viability and delivery risk.
TL;DR
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– A limited group of English councils is expected to pilot the Infrastructure Levy ahead of national roll‑out, with formal announcements anticipated in stages.
– Early adopters will prepare evidence, consult on charging schedules and undergo examination before any pilot “go‑live”, so timing will vary by authority.
– Section 106 is set to remain for site‑specific mitigation, while the Levy targets broader infrastructure and affordable housing, shifting viability dynamics.
– Teams should watch local programmes, build sensitivity around gross development value assumptions and revisit land deals and heads of terms as details emerge.
– Key unknowns include transitional rules, affordable housing routes “in kind” versus cash, and how appeals and examinations will operate in practice.
Early adopters and the road to implementation
/> Officials have signalled that the first wave will be confined to councils with the capacity and pipeline to trial the Levy and share lessons. The process will likely mirror CIL set‑up in outline: an evidence base on development values and costs; draft charging schedules; consultation; independent examination; and then adoption. That sequencing means “key dates” arrive in phases rather than a single start line, beginning with central designation of early adopters, followed by local programme timetables for consultation and examination. Industry expectations are that live charging under the pilots would only follow once schedules are adopted, with transitional provisions preserving existing Section 106 and CIL arrangements for applications already well advanced. Affordable housing is intended to be secured primarily through the Levy, potentially with “in‑kind” delivery on site, though site‑specific obligations would still be handled through Section 106 where necessary.
What it means in practice is a shift away from protracted negotiations on most schemes towards a more formulaic charge linked to development value. That could alter land pricing and the timing of payments, with implications for contractor mobilisation and supply chain commitments. Developers may see less scope for bespoke trade‑offs through Section 106, while councils will be aiming for more predictable receipts to fund transport links, utilities and community facilities. Consultants and employers’ agents will need to keep one eye on indexation and valuation triggers, as the Levy’s link to gross development value could change obligations late in the delivery cycle if markets move.
On the ground, a plausible scenario could look like this: a medium‑scale, mixed‑use project in an early adopter authority reaches pre‑application just as the council opens consultation on its draft Levy rates. The client team runs twin viability models—one assuming today’s contributions, the other reflecting the proposed Levy—because the application could straddle the transition. When the charging schedule is adopted, the scheme falls within scope, and the council signals that part of the affordable housing can be delivered in kind on site, with a balancing cash payment on completion. The contractor is asked to hold design freeze milestones until the gross development value assessment methodology is confirmed, nudging procurement into a slightly later quarter. Finance insists on a wider contingency to cover potential Levy uplifts if sales values outperform appraisal assumptions.
# What to watch next
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– Formal designation of the early adopter councils and the scope of the pilot powers they will exercise.
– Publication of draft regulations and guidance clarifying valuation points, exemptions, reliefs and indexation.
– Transitional rules setting out which applications remain under CIL/Section 106 and which switch to the Levy.
– The approach to affordable housing, including how “in‑kind” delivery will be valued and enforced.
# Caveats
/> There is still no fixed, public timetable for all stages, and political or market shifts could influence pace and design. The pilot areas may move at different speeds depending on resourcing and examination capacity, so dates will not be uniform. Key mechanics—such as appeals, viability review points and treatment of phased schemes—are expected to be settled in regulations and guidance rather than through broad statements. Until those are published, forecasts about cashflows and land values carry an unavoidable margin of error.
The pilots are intended to de‑risk national roll‑out by gathering real‑world data and ironing out process frictions. The central question is whether the Levy can reliably fund infrastructure and affordable housing without tipping marginal sites into delay or redesign.
FAQ
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What is the Infrastructure Levy and how does it differ from CIL or Section 106?
The Infrastructure Levy is a planned charge on development intended to capture a proportion of scheme value to fund local infrastructure and affordable housing. Unlike the Community Infrastructure Levy, it is expected to be more closely linked to the gross development value of a scheme. Section 106 obligations would not disappear, but would focus on site‑specific mitigation and legal matters rather than carrying the bulk of the financial contribution.
# Who are the “early adopter” councils and how will they be chosen?
/> Early adopters are expected to be a limited group of English planning authorities selected to pilot the Levy before wider roll‑out. Selection is likely to emphasise capability, a suitable development pipeline and a willingness to test new processes and digital reporting. Formal confirmation of which councils are involved is awaited.
# When could the pilots start and how long might they run?
/> Pilot timing will depend on when regulations are made, councils’ evidence gathering, consultation, and the outcome of independent examination. Industry watchers expect a staged approach, with adoption dates varying by authority rather than a single national switch. The pilots are likely to run long enough to capture planning, build and completion triggers, but precise durations have not been set out publicly.
# Will Section 106 and CIL continue during the pilot period?
/> Yes, transitional provisions are expected so that live applications and existing permissions remain under current regimes where appropriate. Section 106 would continue for site‑specific mitigation and legal controls even where the Levy applies. CIL would persist in areas not piloting the Levy until any future switch‑over is confirmed.
# How might the Levy change affordable housing delivery?
/> Policy intent points to affordable housing being secured primarily through the Levy, with scope for “in‑kind” on‑site delivery valued against the charge. Details on valuation, tenure mix and enforcement are expected to be set out in regulations and guidance for pilots. Until those are published, developers should model both cash and in‑kind possibilities and consider how late‑stage value changes could affect obligations.
